USDA home loans offer Utah buyers the opportunity to purchase a home with zero down payment in eligible rural and suburban areas. If you are looking to buy outside the Wasatch Front metro core, a USDA loan may be one of the most affordable paths to homeownership available in 2026.
This guide covers how USDA loans work, which Utah areas qualify, current income limits, credit and eligibility requirements, and how the Sharla Ellis Team can help you determine if this program fits your situation.
USDA home loans are mortgage programs backed by the United States Department of Agriculture. They are designed to help low-to-moderate income buyers purchase homes in rural and qualifying suburban areas. The program aims to promote homeownership in communities that might otherwise lack access to affordable mortgage financing.
There are two main types of USDA home loans:
USDA Guaranteed Loans are the most common. These loans are issued by private lenders (like Fairway) and guaranteed by the USDA. They offer 100 percent financing, competitive interest rates, and flexible credit requirements.
USDA Direct Loans are issued directly by the USDA to very low-income borrowers who cannot qualify for other financing. These have stricter income limits but may offer subsidized interest rates.
Most Utah buyers work with the Guaranteed Loan program through a participating lender.
USDA loans offer several advantages that make them attractive to Utah buyers, especially those purchasing in outlying areas.
Zero down payment. USDA loans offer 100 percent financing. You can purchase a home without any down payment, which removes one of the biggest barriers to homeownership.
Competitive interest rates. Because the loans are backed by the federal government, lenders can offer rates that are often lower than conventional loans.
Lower mortgage insurance costs. USDA loans require an upfront guarantee fee of 1 percent (which can be rolled into the loan) and an annual fee of 0.35 percent. This is typically lower than FHA mortgage insurance premiums.
Flexible credit requirements. While a 640 credit score is preferred for automated approval, manual underwriting may be available for scores in the 600 to 639 range with compensating factors.
Closing costs can be financed. In some cases, closing costs can be rolled into the loan or covered by seller contributions.
No loan limits. Unlike FHA and conventional conforming loans, USDA loans do not have a maximum loan amount. Your borrowing capacity is based on your income and debt ratios.
Despite the "rural" designation, a significant portion of Utah qualifies for USDA financing. The main ineligible areas are the urban cores along the Wasatch Front, including Salt Lake City, Provo, Ogden, and their immediate suburbs. However, many communities just outside these metros are fully eligible.
Here is a breakdown by county:
Tooele County is one of the best options for USDA buyers near Salt Lake City. The entire county qualifies, including:
Tooele City
Grantsville
Stansbury Park
Erda
Lake Point
These communities are 30 to 45 minutes from downtown Salt Lake City and offer more affordable home prices than Salt Lake County proper.
Most of Salt Lake County is ineligible, including Salt Lake City, West Valley City, South Jordan, Draper, Sandy, Murray, and Midvale. However, some mountainous areas on the edges of the county may qualify. Always verify specific addresses using the USDA eligibility map.
The Provo-Orem corridor is ineligible, but areas east of Utah Lake and some surrounding rural communities may qualify. Eagle Mountain has historically been USDA eligible, though you should verify current status for specific addresses.
Logan and its immediate suburbs (Providence, North Logan) are ineligible. However, surrounding communities qualify:
Hyrum
Smithfield
Hyde Park
Richmond
Wellsville
The Ogden metro area is ineligible. Eligible communities include Eden, Huntsville, and mountainous areas west of U.S. 89.
Most of Davis County is ineligible, including Bountiful, Centerville, Farmington, Kaysville, Layton, and Clearfield. Only mountainous areas on the edges may qualify.
Nearly all of Summit County qualifies for USDA loans, including Heber City, most of Park City, Kamas, and surrounding areas. Only the Emigration Canyon area near I-215 is ineligible.
The St. George metro area and I-15 corridor are ineligible. However, Hurricane, La Verkin, and areas north and west of St. George may qualify.
Eligibility boundaries can be very specific, sometimes varying block by block. Before making an offer on a property, always verify the address using the USDA's official property eligibility tool at eligibility.sc.egov.usda.gov. We can also run this check for you during pre-approval.
USDA loans have income limits based on your household size and county. Your total household income (including all adult members, not just the borrowers) must be at or below 115 percent of the area median income.
For 2026, the standard USDA income limits for most Utah counties are:
1 to 4 person household: $119,850
5 to 8 person household: $158,250
Some higher-cost Utah counties may have increased limits. For households larger than eight people, the USDA adds 8 percent of the base limit for each additional member.
Important: The USDA counts income from all adult household members (age 18 and older), not just the people on the loan. This includes wages, self-employment income, Social Security, pensions, alimony, child support, and rental income. Certain deductions (such as childcare expenses and medical expenses for elderly household members) may be applied to reduce your qualifying income.
USDA loans have more flexible credit requirements than many buyers expect.
For automated approval (GUS): A minimum credit score of 640 is typically required for the loan to receive automated approval through the USDA's Guaranteed Underwriting System.
For manual underwriting: Borrowers with credit scores between 600 and 639 may still qualify through manual underwriting if they have compensating factors such as a low debt-to-income ratio, significant savings, or a strong payment history on housing expenses.
USDA Direct Loans: For very low-income borrowers applying for USDA Direct Loans, credit requirements may be more flexible, but income limits are stricter.
USDA loans have specific limits on how much of your income can go toward debt payments.
Housing ratio (front-end): Up to 29 percent of your gross monthly income can go toward your mortgage payment, including principal, interest, taxes, and insurance (PITI).
Total debt ratio (back-end): Up to 41 percent of your gross monthly income can go toward all monthly debt payments, including your mortgage plus student loans, car payments, credit cards, and other obligations.
Exceptions may be made for borrowers with strong credit scores, significant cash reserves, or other compensating factors.
Not every property in an eligible area qualifies for a USDA loan. The property must meet certain requirements:
Primary residence only. The home must be your primary residence. USDA loans cannot be used for investment properties, vacation homes, or income-producing properties.
Single-family home. The property must be a single-family residence. This includes detached homes, townhomes, and approved condos. Multi-unit properties do not qualify.
Modest in size and value. The home should be modest for the area. For USDA Direct Loans, there is a general guideline of less than 2,000 square feet, though Guaranteed Loans are more flexible.
No in-ground swimming pools (for Direct Loans). Guaranteed Loans may allow pools in some cases.
Safe and sanitary condition. The property must meet basic safety and habitability standards as determined by the appraisal.
USDA loans have two fees that function as mortgage insurance:
Upfront guarantee fee: 1 percent of the loan amount. This can be rolled into the loan so you do not need to pay it out of pocket at closing.
Annual fee: 0.35 percent of the remaining loan balance, paid monthly as part of your mortgage payment.
These fees are generally lower than FHA mortgage insurance premiums, making USDA loans cost-effective over time.
Here is how USDA loans compare to other common loan programs:
Down payment: USDA requires zero down. FHA requires 3.5 percent. Conventional loans typically require 3 to 5 percent (or more without PMI).
Mortgage insurance: USDA has the lowest ongoing insurance cost at 0.35 percent annually. FHA charges 0.55 percent annually (for most loans) plus an upfront premium of 1.75 percent. Conventional PMI varies based on credit and down payment but can be canceled at 20 percent equity.
Credit score: USDA typically requires 640 for automated approval. FHA accepts 580 with 3.5 percent down. Conventional loans generally require 620 or higher.
Income limits: Only USDA has income limits. FHA and conventional loans do not cap your income.
Property location: Only USDA has geographic restrictions. FHA and conventional loans can be used anywhere.
The process for getting a USDA loan is similar to other mortgage programs, with a few additional steps:
Pre-approval. We review your income, credit, and debts to confirm you meet USDA guidelines and determine your purchasing power.
Property eligibility check. Before making an offer, we verify that the property address is in a USDA-eligible area.
Offer and contract. You work with your real estate agent to make an offer and go under contract.
Full application and underwriting. We submit your complete loan file for underwriting review.
USDA approval. After the lender approves your loan, the file goes to the USDA for final review and guarantee commitment. This adds a few days to the timeline.
Closing. Once all approvals are in place, you close on your new home.
USDA loans may take slightly longer to close than conventional loans due to the additional government review. Plan for 45 to 60 days from contract to closing.
No. USDA loans are not limited to first-time buyers. You can use a USDA loan whether you have owned a home before or not, as long as you meet the income and property eligibility requirements.
USDA loans are primarily for purchasing existing homes. However, USDA construction loans are available in some cases for building a new home in an eligible area. The process is more complex and requires working with a builder who is familiar with USDA requirements.
Certain deductions can be applied to reduce your qualifying income. These include childcare expenses for children under 12, medical expenses for elderly household members, and care expenses for disabled household members. We calculate these adjustments to see if they bring you within the limit.
If you already have a USDA loan, you can use the USDA Streamline Refinance program to lower your rate with minimal documentation. If you currently have a different loan type and want to refinance into a USDA loan, you would need to go through the full application process and meet all eligibility requirements.
Herriman is located on the Wasatch Front and is generally not USDA eligible. However, eligibility boundaries can be complex, so specific addresses should always be verified using the USDA property eligibility tool.
The easiest way is to use the USDA property eligibility map at eligibility.sc.egov.usda.gov. Enter the property address, and the tool will tell you whether it falls within an eligible area. We also run this check as part of our pre-approval process.
If you are considering buying in Tooele County, Summit County, or other USDA-eligible areas near Salt Lake City, a USDA loan could be your path to zero-down homeownership. The Sharla Ellis Team has extensive experience with USDA loans in Utah and can help you determine if you qualify.
Reach out for a conversation. We will check property eligibility, review your income and credit, and show you exactly what your options are.
Sharla Ellis
Producing Branch Manager, Senior Loan Advisor
NMLS #209040
Fairway Independent Mortgage Corporation
2150 South 1300 East, Suite 150
Salt Lake City, UT 84106
Phone: (801) 580-1861
Email: [email protected]
Website: sharlaellis.com
This article is for educational purposes and does not constitute a commitment to lend. USDA loan eligibility is subject to property location, household income limits, credit review, and underwriting approval. Income limits and eligible areas are subject to change. Contact us to verify current program requirements and your individual eligibility. Sharla Ellis, NMLS #209040, Fairway Independent Mortgage Corporation, NMLS #2289. Equal Housing Opportunity.